Question

An electronic manufacturer must expand by building a second facility. The search is narrowed to four locations, all of which are acceptable to management in terms of dominant factors. Assessment of these sites in terms of seven location factors is shown in the table below.

Location factor	Factor weight	Location
		A	B	C	D
Labour climate	20	5	4	4	5
Quality of life	16	2	3	4	1
Transportation system	16	3	4	3	2
Proximity to markets	14	5	3	4	4
Proximity to materials	12	2	3	3	4
Taxes	12	2	5	5	4
Utilities	10	5	4	3	3

Calculate the factor rating score for each location and identify the best location.

Answer 1

Location Factor	Factor Weight	Location A	Location B	Location C	Location D
Labour Climate	20	5	4	4	5
Quality of Life	16	2	3	4	1
Transportation System	16	3	4	3	2
Proximity to markets	14	5	3	4	4
Proximity to materials	12	2	3	3	4
Taxes	12	2	5	5	4
Utilities	10	5	4	3	3

FOR LOCATION A

Factor Rating for location A = (20 × 5) + (16 × 2) + (16 × 3) + (14 × 5) + (12 × 2) + (12 × 2) + (10 × 5)

Factor Rating for location A = 348

FOR LOCATION B

Factor Rating for location B = (20 × 4) + (16 × 3) + (16 × 4) + (14 × 3) + (12 × 3) + (12 × 5) + (10 × 4)

Factor Rating for location B = 370

FOR LOCATION C

Factor Rating for location C = (20 × 4) + (16 × 4) + (16 × 3) + (14 × 4) + (12 × 3) + (12 × 5) + (10 × 3)

Factor Rating for location C = 374

FOR LOCATION D

Factor Rating for location D = (20 × 5) + (16 × 1) + (16 × 2) + (14 × 4) + (12 × 4) + (12 × 4) + (10 × 3)

Factor Rating for location D = 330

Since Factor Rating is maximum for Location C, therefore the best location is Location C